DOJ to no longer use guidance docs as binding rules for enforcement

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Dive Brief:

In a move that could have major implications for government litigation, the Trump administration has barred the Department of Justice from citing noncompliance with guidance documents in civil enforcement actions.

The new policy, spelled out in a Jan. 25 memorandum by Associate Attorney General Rachel Brand, aligns with President Donald Trump’s pledge to scale back regulations on U.S. businesses.

Dive Insight:

Federal agencies issue guidance documents to clarify laws and rulemaking. While they are referred to as voluntary, there is the expectation that stakeholders will comply with the recommendations and specifications they lay out on a given topic. In the past, the government has used guidance documents to support charges that a business or individual violated a law.

Critics have complained that agencies use guidance documents as a substitute for rulemaking.

Under the new policy, DOJ “may not use its enforcement authority to effectively convert agency guidance documents into binding rules,” the memo states. “Likewise, department litigators may not use noncompliance with guidance documents as a basis for proving violations of applicable law in [affirmative civil enforcement] cases.”

The revised policy could have major ramifications for False Claims Act lawsuits and other federal litigation. According to a footnote, "'Affirmative civil enforcement' refers to the Department’s filing of civil lawsuits on behalf of the United States to recover government money lost to fraud or other misconduct or to impose penalties for violations of Federal health, safety, civil rights or environmental laws."

In a recent blog, AHA General Counsel Melinda Hatton, Deputy General Counsel Maureen Mudron and Hogan Lovells partner Jonathan Diesenhaus praised both directives, saying they will prevent DOJ from raising "operational deficiencies once subject to corrective action plans to the level of fraud cases with serious reputational and financial consequences." By allowing DOJ to dismiss qui tams that lack merit, healthcare organizations may be spared huge costs for frivolous lawsuits, the blog says.